In a case of first impression in the Ninth Circuit, the US Court of Appeals recently handed bankruptcy trustees a significant power by ruling in TheLovering Tubbs Trust v. Hoffman (In re O’Gorman) that a trustee can avoid intentionally fraudulent transfers under the Federal Bankruptcy Code, even if no creditor suffered harm as a result.

On August 28, 2024, Judge Gregory B. Williams of the US District Court for the District of Delaware issued a ruling in AIG Financial Products Corporation, Civ. No. 23-573, affirming an order on appeal from the Delaware Bankruptcy Court that denied a motion to dismiss a chapter 11 petition as a bad faith filing.

On July 19, 2024, Judge Michael Wiles of the US Bankruptcy Court for the Southern District of New York issued a ruling in In re Mercon Coffee Corporation, Case No. 23-11945, invalidating insider releases in a proposed chapter 11 plan on the basis that the releases were improper retention-related transfers.

Judge Wiles found that he could not approve the releases – even though the debtors had promised them and insiders had relied upon that promise – because the releases did not meet the strict requirements of Bankruptcy Code Section 503(c).

Bankruptcy Code Section 502(b)(6) establishes a Statutory Cap on the damages a landlord can claim arising from the termination of a lease in bankruptcy case. Courts have split on how to calculate the Statutory Cap, whether and how to apply letters of credit to reduce the Statutory Cap, and whether the Statutory Cap applies to a landlord’s claims against a lessee’s debtor-guarantor.

On March 26, 2024, the US District Court for the Southern District of New York issued an opinion addressing the foregoing issues:

On March 15, 2024, the US Court of Appeals for the Seventh Circuit issued a ruling that broadly applied the “safe harbor” provision of section 546(e) of the Bankruptcy Code to insulate from state and federal fraudulent transfer attack certain transactions involving private securities. Petr, Trustee for BWGS, LLC v. BMO Harris Bank, N.A. and Sun Capital Partners VI, L.P., No. 23-1931, 2024 WL 1132170 (7th Cir. 2024). The court addressed two questions of first impression in the Seventh Circuit:

On March 11, 2024, Judge Colm F.

On December 12, 2023, in the case of In re Envision Healthcare Corp., Case No. 23-90342, Judge Christopher M. López of the US Bankruptcy Court for the Southern District of Texas determined that Section 541 of the Bankruptcy Code conflicts directly with, and therefore trumps, Section 18-304 of the Delaware LLC Act to prevent the termination of a member’s interests in a Delaware limited liability company arising from such member’s bankruptcy filing.

Summary of Section 18-304 of the Delaware Limited Liability Company Act (LLC Act)

The court-fashioned doctrine of "equitable mootness" has frequently been applied to bar appeals of bankruptcy court orders under circumstances where reversal or modification of an order could jeopardize, for example, the implementation of a negotiated chapter 11 plan or related agreements and upset the expectations of third parties who have relied on the order.

To promote the finality and binding effect of confirmed chapter 11 plans, the Bankruptcy Code categorically prohibits any modification of a confirmed plan after it has been "substantially consummated." Stakeholders, however, sometimes attempt to skirt this prohibition by characterizing proposed changes to a substantially consummated chapter 11 plan as some other form of relief, such as modification of the confirmation order or a plan document, or reconsideration of the allowed amount of a claim. The U.S.

One year ago, we wrote that, unlike in 2019, when the large business bankruptcy landscape was generally shaped by economic, market, and leverage factors, the COVID-19 pandemic dominated the narrative in 2020. The pandemic may not have been responsible for every reversal of corporate fortune in 2020, but it weighed heavily on the scale, particularly for companies in the energy, retail, restaurant, entertainment, health care, travel, and hospitality industries.